The Great Asian Haze Part 1: Politics and Palm-Oil

In the wake of every catastrophic environmental disaster there will always be a geopolitical story to tell. Often times the story will reveal how ill-prepared a country was to handle an earthquake, flood, or typhoon, but other times it will reveal a series of human mistakes, complex social interactions, and geographic and climatic factors that when combined end up creating the disasters themselves.

As you may have already heard, Indonesia is currently suffering from massive forests fires that are wiping out acres of rainforest and releasing tons of smog into the air. The situation is so severe that you can even read about it on wikipedia, just weeks after it all began. Upon an initial investigation we see a common culprit being revealed. The rainforests are being slashed and burned, illegally, in order to grow palm trees to produce palm oil. When this happens during the dry-season, like it has now, and gets out of control a larger fire erupts. However, nothing has really been done to explain the complexity of the events taking place. It’s easy to blame the malpractice of slash and burn or improper enforcement, but in order to fully understand what is happening here we have to take a step back in time.

When Indonesia won its independence in 1949 the result was bittersweet. Like many former colonies, Indonesia was highly underdeveloped. What was invested into the economy was only done so to make the exploitation of resources more efficient, not to make the colony stronger as a whole. So when independence also meant inheriting a large amount of public debt, their chances for success grew very slim. After years of little to no progress, a failed communist uprising, and extreme hyperinflation Indonesia was left with no other option but to rely on foreign investment to get by (De Vries). This meant closely aligning with The International Monetary Fund (IMF) and the World Bank, two institutions that have some major pitfalls. 

As with many loan programs there are several things that can go wrong. First of all, the IMF and the World Bank practice conditional lending. This means they will only give a country money if they follow certain economic policies, and adhere to certain provisions regarding government spending. It’s meant to ensure a country won’t need to take out loans in the future; however, it often ends up affecting a country’s autonomy (Farmer, 88). Not only that, but the IMF and World Bank actively ignored and fueled corruption during Suharto’s reign, because they knew they were still benefiting from the lending. They encouraged policies that allowed easier trade and more transnational companies to go in and drill for oil, mine for minerals, and build plantations, or in other words made it easier for resources to be exported out. Suharto and the U.S. got richer and the economy eventually suffered. This leads us to the problem we are having today.

It’s never a good idea to become reliant on something, and unfortunately when it comes to palm oil in Indonesia that may already be the case. However, before 1984 palm-oil production was relatively low. It wasn’t until the early 2000s, when the demand for biofuels took off, that the market began to expand (USDA). Alongside biodiesal, palm-oil can be used in cooking and as a replacement for trans-fats, so its popularity is not likely to die down any time soon.

For Indonesia’s rural people palm oil is a blessing, despite the obvious downsides it has. According to the World Growth Organization, “agriculture provides employment for over 41 percent of the Indonesian population and provides around two-thirds of rural household income.” On top of that, palm oil happens to be the country’s second most successful (agricultural) product. When the money made from palm oil is invested back into the country, through healthcare and education, it helps to lift the people out of poverty even further.

With a legacy of colonialism, corruption, and poverty, simply banning palm oil will not be able to solve this problem and could actually make things worse. Unfortunately, because slash and burn is the easiest method to clear a forest, people are going to continue to do it. That’s because it will give people the greatest competitive advantage in the market, allowing them to sell more, faster, and at a lower price than the competitor. The paradox is that the free market so often comes at the price of the environment and public health, which are both economic interests as well.

Environmentalists aren’t opposed to economic growth, we want people to be successful just as much as anybody else does, but something’s got to give. That’s why in Part II. I will be going into more detail on the environmental impact the fires have on the world, and what that means for the future.


Blogger: Erin Spencer 


De Vries, Idries. "Neo-Colonialism And The Example Of Indonesia – Analysis." Eurasia Review. New Civilisation, 03 Nov. 2011. Web. 19 Nov. 2015.

Farmer, Paul, Jim Young Kim, Arthur Kleinman, and Matthew Basilico. Reimaging Global           Health an Introduction. Berkley: U of California, 2013. Print.

Indonesia: Palm Oil Expansion Unaffected by Forest Moratorium. United States Department of   Agriculture, 2013. Print.

The Economic Benefit of Palm Oil to Indonesia. Arlington: World Growth, 2011. Print.

Image 1. Sources: Statistik Perkebunana, Indonesia (2011); Palm Oil Industry (2013)

Image 2. Palm Oil  Source: Digital image. Thefoodjourney.Web. 19 November 2015.